Blank for negotiable banking instruments.



atened May 8, 1.93.7'.

2 SHEETS-SHEET l.

0.13A WHEELER.

BLANK FOR NEGTMBLE BNKNG {NSYRUVIEIVSl APPLICATION HLED AL1G.& ,1.916`92259543@ ,A V 1 A V u womomww ms o wum D. B. WHERER BLANK FORNEGO'HABLE www@ lms'mufvlm's,

APPLICATION HLED MGH. 1.915.

I Emme@ May a, mi?.

2 SHEETS-SHET 2.

For

OEE YELV FDM DATE will pay kan Am?. charge m tha accun'a ci im gwnaal ailheelex" azusta Banking and Gradi Association.

( with accz'wsd imams?. at the rate of per mmm.,

For

Signori DAVID BERE WHEELER, OE? WASHINGTO, DSTRGT OF COLUMBA.

BLANK FOR NEGOTIABLE BANKING INSTRUMENTS.

.Specification of Letters Patent.

Patented May 8, 191'?.

Appli-cation filed August 9, 1916. Serial No. 114,077.

To 11H Hifi/0m it 'may concern.'

Bc it known that l, Darn) Brno WHEELER, a citizen of the United States,residing at lVashington, District 0f Columbia, have invented anddiscovered certain new and useful improvements in Blanks forNegotiableBanking' Instruments, of which the following is a speciiication. y

As is well known, a very large lproportion of business is carried onuponcredit or upon borrowed capital. In order to establish a borrowingcredit at banks and money loaning institutions, a personv must maintainan account of a character that will justify the institution in extendingcredit. The systems nowin practice result in borrowing credit beinglimited to a comparatively few people, those having sullicient resourcesand able to maintain a bank account of a character to justify extendingcredit to them. lt is also well known that persons in moderatecircumstances, working for modest salaries, and unable lto accumulateresources or maintain a bank account of a character justifying` creditunder the presentsystem, are frequently in need of credit and aredeprived of the accommodation and benefits thereof, or compelled to payexorbitant rats ofinterest for such acconnnodations, thereby seriously4burdening themselves with obligations and extraordinary payments thatmight otherwisev be avoided.

T he object of my said invention is to devise a system of establishing abanking credit and provide means whereby a person, without capital orproperty, may obtain a loan, based upon his earning capacity, from anyregular banking institution, without further yexpense than the paymentof interest current in such commercial transactions.

The system which l have devised consists in merging into groups, orassociations, a number of persons who will agree to deposit, in certainbanking institutions, their earnings and savings, in a common or jointaccount, thus pooling their bank balances and establishing an accountthat, in itself, is entitled to borrowing bank credit available for theaccommodation of members, further, in devising a plan whereby thiscredit may eq ibly distributed and proportioned among the members, andthe bank guaranteed against-loss, through the pooling of the aggregatedeposits and the establishment of a, guarantee fund for the purpose. lfurther provide, as a feature of my system, a bank' cal, safe andexpeditious manner.

guaranteed investment which may be made available to members of theassociation who, instead of being borrowers, desire to become loaners orinvestors, thereby providing a safe and remunerative investment forsmall sums and encouraging thrifty people to become members of theAassociation.

The invention consists, of course, not so much in the system which havedevised, as in the means for carrying it into practical effect, embodiedlargely in blank negotiable instruments, capable of being used to insurethat the purposes of the system be fulfilled and its operation carriedonin an economi- Before describing theblanks in detail, however, theoperation of the system will be more fully outlined. Y

The association is formed by enlist-ing as members a number of personsinterested either because of the advantages offered from a borrowingstandpoint or from an investment standpoint. The membership of theassociation need not be limited--the larger the number, the more use-fnlthe association and the more efficient theoperation of the plan. Themembers of the association all agreeto deposit their funds in a certainbanking institution, or in any one of a certain number of designatedbanks (when the association is of sufficient size to justify accounts inseveral banks), tothe credit of the association, or joint, account. Thebank in which the deposit is 1unade will issue a certificate of deposit,hereinafter' described, negotiable or subject to withdrawal, on thejoint signature of the depositor and a designated olicer of theassociation, together with accrued interest. A certain per cent. of theaccount, to be agreed upon between the association and the bank, will beset aside and held to the credit of the association as a fund toguarantee the bank against loss on loans which borrowers may ultimatelyfail to liquidate. In suc-h an association, and under the conditionsprevailing, such a fund would be a comparatively small per cent.; underpresent banking rules and regulations, not

to exceed from 5 to l0 per cent.

Loans will be made to members of the association by the bank afterapplication and on notes indorsed by the association and bearinginterest at the rate current for regular'bank loans at the time, thenotes being payable to the associationin monthly instalments and to bepaid at maturity to the -tion guarantee loan fund without eration.

bank bythe association from its general fund. The loans to members ofthe association are not only secured by the association account andtheindorsement of the association itself, but, as above stated, by aspecial reserve fund which may be known as the association guaranteeloan fund, created by the depositors, through the association,authorizing the bank to set aside an agreed per cent. from the depositsof each member. When 4the funds in the association account are notsufficient to take care of any defaultingloans, and after the bank hasgiven notice to the association, the bank may then pay such defaultingloans from this associafurther authorization, and the associationthereby takes care of such defaulting loans, protecting its credit andkeeping unimpaired its outstanding certificates of deposit. guaranteeloan fund provides for a pro rata apportionment of the def'faultinglloans among the members, in case the accumulations to the credit of theassociation in the association'bank account (to be hereinafter morefully explained), are not sufiicient.

I will now proceed'to describe the blankforms of negotiable instrulnentswhich I have provided for carrying my plan into op- These blank formsare illustrated in the accompanying drawings, which are madea parthereof, and .in which Figure l illustrates the face of a blankcertificate of deposit, with stub; Fig. 2 the reverse side,or backthereof; and Fig. 3 the face of a blank i loan investment bond; theseblank instruments being the chief means of enabling my plan to be putinto successful operation, and constituting the leading feature of my invention.

The certificate of deposit shown in Fig. l is numbered, and acorresponding number placed upon the stub. .It bears the name of theassociation, 'such as Wheeler Industrial Banking and Credit Association,or any other appropriate name that the lmembers of the association mayselect. Beneath the name of the association it should preferably havethe title of the instrument, such as Certificate of deposit andwithdrawal' order. There should then be a blank adate line, then a blankline for the name of the .depositor, then a blank line for the amountdeposited, and beneath the amount deposited will be printed the amountof interest, in even cents, for a specified time, at the rate ofinterest agreed upon. The certificate shown in Fig. l is computed at therate of 3%, that is: Bearing interest of 1 every l months on a $1certificate. 19S every two months on a $2 certificate. le every month ona $1 certificate. And same rate of interest on'every multiple thereof.Then follows the signature of the banking institution per the authorizedofficial. Beneath this is printed:

The,

To be credited to the account of the general fund of Wheeler IndustrialBanking and Credit Association. Subject to withdrawal when order onreverse side is signed by the president of the association anddepositor.

The stub of the certificate has a date line and a blank receipt for thecertificate of de posit, with blanks for identifying the certi.m ficate,and a line for the'signature of the designated official of theassociation.

The reverse side of the certificate', illustrated in Fig'. 2, has at thetop an interest table showing the monthly interest.- The figures andamounts are used to illustrate the interest per month on a givenamount., line B showing the interest for one month on h a certificate ofthe face value indicated iinmediately beneath in line C. For example, a$4 certificate is the lowest amount that -will earn le interest in onemonth at the rate of 3 70, and this is therefore the minimum amountstarted with, running in multipifezthereof up to a .5100 certificate onwhich the interest for one month, at the rate of 3% 4per annum, is 25e'.By means' of this table, the amount of interestdue can be seen at aglance and is readily computable. Beneath. the interest table is a dateline, a line for the name of the. banking institution, and then an orderto pay to the certificate owner or anyv other person he may desire toname, and charge to the account of the association a sum which will bethe face of the certificate'with whatever interest is to be added. Thisorder must be signedhy the depositor and also by the authorized officerof the as sociation, for example, the president of the association.Until this order is signed, both by the depositor and the properassociation ofiicer, the instrument is not negotiable; but after it isthus signed, it becomes a negotiable instrument which may be used anybank check in commercial transactions for the. amount stated in theorder. l

It is intended that these blank certificates of deposit and withdrawalorders shall be printed and bound in bookssimilar to check books. Eachmember of the association r-will be given a book of blanks as required.In

making a deposit. the depositor will fill out the amount, bearinginterest, however, at a i specified rate; but`it-"is not negotiable andcannot be used by the depositor, or anyone else7 until after thewithdrawal order on the back thereof has been properly signed by thedepositor and also by the officer of the association. This makes itnecessary for the depositor, before his certificate car. be

:used, to present it to the oiicer of the asso- `ciation for signature.

The oicer ot' the association makes out the receipt on the stub ot thecertiicate, removes the certificate and places it in the depositors fileof certificates in the association o'iiice. lhe depositor then has thereceipt ofthe association for the deposit. When he needs a certificatofor use, he asce'rtains from the stubs in his book the number of acertificate corresponding with the amount he needs and goes to theassociation and withdraws the same, at which time the oiiicer of theassociation fills in the amount on the withdrawal order, including theinterest for even months up to the time of' withdrawal. The certicate isthereby canceled, and the withdrawal order then becomes a certifiedcheck, negotiable and usable in ordinary commercial transactions. lt ispaid by the bank when presented to the bank, and charged to the accountof the association. rlhe associations average balance, on which the bankwill allow interest, varies, however, from the amount ot outstandingcertifica-tes on which the association account is liable to thedepositor for interest. rlhe balance is always in -favor of theassociation because of the4 fact that the'periods between the date otthe signature ot the otlicer of the association on the certificate andthe period when the cortili cate is'presented to the bank tor payment,run to the'beneiit of the association. Many certificates also will bewithdrawn before the specified interest period, leaving an anou'nt offorfeited interest by vwhich the association will benefit.

By this plan, the depositor is required to deposit his certicates withthe association. This enr-.bles the association to keep track ot thedeposits made by its members and their balances, and to correctlyascertain and compute assets,A liabilities, credits,earnings, losses,etc., of the association.

lt also places in the hands of the associa- ,..g A d. tion, certificatesor deposit of each depositor, which it can deposit with the bank to makenp the pro rata share required ot each depositor in the associationguarantee loan fund.

TWhen a member of the association desires a loan, application is madetherefor and, on approval, a note is given to the bank, signed by theborrower and indorsed by the `association, and bearing current rate ofinterest, on which the loan is made by the bank. -Such form ot' loan, aswill readily be seen, will be of unusually high grade, for thc reasonthat it is notA only backed by the organization, but because theassociation car ries with the bank a guaranteev loan fund of an amountrequired by approved banking rules and regulations. The associationmen.-

ber is thus enabled to secure tunds tor temporary use at currentinterest rates, payable in easy monthlyinstalments to the association,and payable by the association to the bank at a specified period, thusproviding a plan which is not only to the great advantage andconvenience ot' the member otl the association, but also to the bank inthat 1t consolidates'in a single account a large number of smallaccounts each of which, by itself, would be unproiitable and could hecarried by the bank only ,at a loss caused by the time required forlbookkeeping and attention. Such accounts, kept as individual accounts,would establish no borrowing' creditfor thc depositor and thereby bc ot'no value to thc dcpositor or to the bank. liy my improved plan ot'pooling the accounts through thc medium of the association, the accountsbecome available not only for the benefit of the members of theassociation, but also rc'- sult in a banking account which any bankinginstitution will welcome and appreciate.

it will bc understood, ot' course, that `in lieu oi an outsideassociation, a pool or group of depositors may be formed by any bankinginstitution and managed by an oilicer to be selected by the members ofthe pool or otherwise, thereby securing the same advantages, and indescribing my plan, it will be understood that where l have used theterm association, l mean any pool or group ot' depositors associatedtogether in a single bank account, whereby the advantages ofestablishing borrowing credit and security for the bank are attained.

l i Fig. 3, I have illustrated an interest bearing loan investment bond,designed especially for the use of the members ot' the association 'whowish to place their savings on an investment basis and secure theadvantage of larger rates 01"' interest than allowed on the certificateot deposit. lt is well known that savings banks, trust companies, andsuch institutions as encourage savings accounts, do not, as a rule,issue certificates of deposit bearing the higher rates of interestallowed on time deposits in denominations of less than $100. Thisresults in limiting the availability of such certilicates of deposit toa comparatively few people, because it is only a comparatively few ofall depositors `who liave as much as $100 available for investment for aspecified length of time at any one period. .it frequently happens,however, that a person in modest circumstances, or drawing a modestsalary, would like to put $20, or or $50, or some other part ot' $100,in an investment bearing a higher rate of interest for a specified time.The purpose ot my plan is to take care of this class of investors. lWhena member of thc association desires to invest in an investment bearing,for example, interest at 5%, his applilli I interest ongtheir savings,

cation is led and the amount hedesires to so invest noted. @ther membersof the association, as they make like applications, have theirapplications filed and the amounts which' they desire to invest noted.Another member of the association, desir ingv to borrow, for example$100, files his application, when the amount of the loan desired isnoted. The loan is made by the bank at the rate, for example, ci 6% tothe borrower. The bank then issues to each applicant an association loaninvestment bond of $20, $30 or $50 to equal the amount of the loan. Thebond, bearing interest at 5%, matures at the time the loan matures. Thebank thus makes' 1% on the transaction, while the loan has been carriedby the members of the association who ree* ceive 5%. In this way, themembers of the association who desire to save' and have their fundsaccumulate as rapidly as possible, are enabled to get a larger rate ofand fractional amounts of $100 are made'available for such investments.y,

rlhe form of the loan investment bond, as shown in Fig. 3, is simple andneed not b particularly'described. The application for investment insuch a bond is shown on the lower half of the bond, and is also simpleand need not be further described.

It is understood, of course, that the member applying for an investmentbond deposits withl the association certiiicates of deposit, oracceptable collateral, to the amount which he desires to invest in sucha bond, when application is filed.

By this plan, members are enabled to accumulate interest on their idlefunds more rapidly than by the usewrof the certificate of depositbearing the lower rate of in terest, while the bank is able to make aprofit of 1% on the loan as a remuneration for its small trouble inissuing" the bond and making' the loan. The/plan thus makes for theprofit of both parties to the trans action, as well as 'provides anabsolutely safe investment on .the one hand, .and a perfect security forthe loan on the4 other. Summarizing the plan and its operation: The plandoes away with the necessity of keepmg numerous small individual'accounts by the bank with bother incident thereto, which, as is wellknown, make such accounts, as a rule, un profitable to bankinginstitutions. lt substitutes for these numerolls small, unproitableaccounts, a single large account of a profitable character, which4carries with it a borrowing credit, and, -in connection with theguarantee loan fund, insures safety in making loans members, otherwiseunable to command borrowing credit, are given opportunity to obtain'needed loans at current interest the expense and to members wherebysaid rates and thus avoid the burr-en and. hardships so frequentlyresulting` from being forced to borrow at exorbitant and usnri ousrates.

As an example ci the operation o the plan of pooling bank balances underthis system, let us assume that a person, a meniber of such anassociation, has an income of $60 per month. This sum is deposited inthe joint account. of the person require that he use the money beforethe end ofv the month, estimating these expenses at $2 per day.` Notwitls standing this, his average bank balance could be computed at @nethousand bank depositors in the same account would have a joint averagebank bala-nce of $33,000. Under the usual banking rules and regirlations, this would entitle the account 'to a borrowing credit of$26,400. means, the living expenses of these thou sand wageearners, thuspooled and ciated,.would be capitalized. into a comu marcial bank creditfor borrowing purposes sufficient to be of vast service to the members.

lt will be understood that a standard cer ltificate of deposit isestablished with'the low :est denomination. on which the monthly in-,terest is expressible in even cents. Certi@ cates of largerdenominations are provided liby taking numberswhich are multiples of[the standard certificate. 4 Certificates 'of mailer denominations areprovided by takiing numbers which are fractions thereof7 on #which theinterest is expressible in even pente, on interest periods whichareparts off ,the year. For the purpose of providing for sums for whichno certificate of deposit is provided, or which. the denomination wouldexpress the desired sum, two or more een tificates of deposit, lthetotal of which will equal the `desired amount, are taken, For example,when a certificate is to be made cut for $1.39 at the rate. of 3% perannum, the depositor would be given a certificate for $136, one for $2,total of $139; and each of the certificates The living expenses i Bythis l and one for $1, making a' made out with the interest computed ineren cents.

Loans made against the ioint account impair the value of everycertificate ot deposit issued by the the loans made against the'account. This ymakes the credit value of the account sub- `ject touctuation and ymakes necessary a bankjinjust the proportion to ables theassociation to segregate and heild a 13e sufficient number of certicatesot' deposit apart from the general fund to maintain 1 guarantee loan.fund which preserves parity of the value of the certificates presentedfor payment. The expenses of the asso ciation are amply provided for andmaintained out of the earnings of the association account in excess ofthe earnings allotted to 4the members as heretofore explained.

.blank form for a negotiable instrument containing data; With blanks tobe filled in to make a certificate of deposit; directions that theamount deposited Jfor which the certi cate is issued be credited to apooled account; and an order for the Withdrawal o the deposit good onlywhen signed by the depositor and a person authorized to act'or thepooled account, substantially as set forth.

2. A banking system blank for a-negotiable instrument containing datawith blanks to be filled in to make a certificate of deposit; directionsthat the amount deposited be credited to a pooled account; an order lforthel withdrawal of the deposit good only when signed by the depositorand a person authorized to act for the pooled account; and a stubreceipt having a form on which the person authorized to act for thepooled account may receipt to the depositor for the certihficate ofdeposit, substantially as set fort 3. A' blank form for a negotiableinstrument for use in a pooled banking account containing data withblanks to be lled. in make a certificate of deposit to the individat agiven rate in .representing` amounts risposi ual members of the pool*amount deposited "e cr deposit goed only when s positor and a personautlio the pooled account; a stub blank torni for a receipt to personacting for *l f owner of certificate statement tbenon of 1 rateexpressed An ever riode, substantially Li. lin a banni sysenn use inpooled accounts col blanks to be fili ,l dep g information periods;authority to the pooled account; anA Withdrawal oi the d' u est goodonly sigan.: and one au' fined to act i Y. count, substantially set trfina bankingsystein (lation of pooled accounts, bl. including acertiicate oit individual showingy the amo directions to cre-dit theamount account; order for .vitlidre ceipt made for tbe given by a personrepresen account? substantialiy 6. ln a banking o; industrial credit, anego-i uals in a pooled account; gotiable instrument represen4 vestmentsin lloans to members and containing a provision i tion of the investmentby the i d. .i loan, substantially as set forth.

ln Witness whereof, have lier my hand and seal'at i asili fQolumbia,this second day o nineteen hundred and si e

